JOHN & SAL'S AUTO. SERV. v. SINCLAIR REF. CO.

JOHN AND SAL'S AUTOMOTIVE SERVICE, INCORPORATED, a New York corporation, Plaintiff,
v.
SINCLAIR REFINING COMPANY, a corporation domiciled in the State of Maine, Defendant

The opinion of the court was delivered by: RYAN

This suit is again before us on a motion to dismiss the complaint for (1) failure to state a claim upon which relief can be granted and (2) failure to join an indispensable party.

The jurisdiction is predicated on diversity of citizenship and the requisite amount is alleged.

From the pleadings it appears that, on March 24, 1955, plaintiff, John and Sal's Automotive Service Incorporated, a New York corporation, entered into an agreement with defendant Sinclair Refining Company, a Maine corporation, under which plaintiff was to supply emergency road service for a portion of the Long Island parkway system. The parkway property involved in this suit is owned by the State of New York and its operation is under the control of the Jones Beach State Parkway Authority. The Authority is a 'public benefit corporation', which consists of the Commissioners of the Long Island State Park Commission. (These two bodies will be referred to as the 'Authorities'.)

It also appears that this agreement was in reality a 'sub-license' granted by defendant and accepted by plaintiff with full knowledge of the relevant provisions of a primary license issued to defendant Sinclair by the 'Authorities'. The primary license was for five years and the 'Authorities' reserved the right to pass on or dismiss, with the proper notice, anyone engaged by Sinclair under a sub-license clause.

A copy of the sub-license is attached to the complaint as Exhibit A and also attached is a copy of a letter from defendant, with a notation that it was received by plaintiff, terminating the agreement between Sinclair and plaintiff as of midnight June 29, 1958.

Plaintiff seeks an injunction restraining defendant from permitting anyone other than plaintiff from providing emergency service and from cancelling the sub-license. Plaintiff does not seek to recover monetary damages.

This suit was originally filed against defendant Sinclair and the 'Authorities'. A temporary restraining order was issued on July 3, 1958 and on July 8, 1958 a motion for an Injunction Pendente Lite was heard and denied, at which time the temporary restraining order was vacated. Plaintiff appealed and the Court of Appeals (2 Cir.) affirmed (264 F.2d 711).

On August 5, 1958, the multiple defendants made a joint motion to dismiss for lack of jurisdiction over the subject matter. On August 11, 1958, plaintiff amended its complaint and the motion was heard. The Court granted the motion as to the defendant 'Authorities', but denied the motion as to defendant Sinclair, D.C., 165 F.S. 518. Plaintiff also appealed from this order and the Court of Appeals (2 Cir.) dismissed the appeal for lack of a final judgment. 267 F.2d 862.

On October 14, 1958, while these appeals were still pending, defendant Sinclair made a motion before us to dismiss for (1) failure to state a claim upon which relief could be granted and (2) failure to join an indispensable party. At that time we denied the motion without prejudice to renewal after termination of the pending appeals. The defendant now renews the motion.

For the purposes of the motion to dismiss for failure to state a claim, the well pleaded material allegations of the complaint are taken as admitted but conclusions of law or unwarranted deductions of fact are not admitted. 2 Moore's Federal Practice (2nd Edition) 2244, par. 12.08.

The complaint before the Court is the original one filed as amended prior to the August 11, 1958 motion. The 'Authorities', dismissed by this Court as defendant, are still named parties in the allegations of this pleading, and we accept all of these allegations properly pleaded.

It is thus pleaded that defendant Sinclair prematurely and without justification terminated the agreement and had as its purpose the forfeiture of all the plaintiff's investment which was made in 'reliance upon the original five year term called for in the original agreement of March 24, 1955' (Allegation 9 of Plaintiff's Complaint).

We have already noted that the original agreement is attached to the complaint and therefore a part of it (Rule 10(c) F.R.Civ.P., 28 U.S.C.A.).

Nowhere in this agreement is there any mention of a five year term or, for that matter, of any term of years. Plaintiff does not plead a further subsequent oral agreement but ...

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